"The infamous interlocking of product and credit market will be released and farmers will be freed to market the produce anywhere in the country or to the exporters", he said.
The problems of imperfections plaguing agricultural markets were being discussed since the mid-1960s and it was found that there is an urgent need for the reforms, he said.
The farm sector Bills offer “revolutionary” changes benefiting the farmers and help break the network of middlemen, money-lenders and market operators, an agriculture expert said on Wednesday. Former Director of the Institute for Social and Economic Change, Prof.R S Deshpande said the farmer would now be able to sell produce across the country in any market of his or her choice at the price negotiated with the purchaser. This price discovery by the farmers will certainly benefit them and get them larger portion of the market margins, which was hitherto enjoyed by the traders, according to him. “It will be completely erroneous to assume that the purchasers will be only the corporate sector and nobody else”, Deshpande, who was Head of the Agricultural Development and Rural Transformation Centre between 1998 and 2008, told PTI.
At ADRTC, he steered a mega study on “Farmer at the Millennium” and completed many research works. He was a policy supporting academic to both the Government of Karnataka and Union Ministry of Agriculture. “This did not come as a surprise”, Deshpande said on the Farmers Produce Trade and Commerce (Promotion and facilitation) Bill 2020, and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill 2020, which were passed by the Rajya Sabha on Sunday. “It was long-pending reforms and Prime Minister Narendra Modi had the guts to do it”, he said.
The problems of imperfections plaguing agricultural markets were being discussed since the mid-1960s and it was found that there is an urgent need for the reforms, he said. “Before undertaking the enactment of APMC in 1967, there was enough discussion on the issues involved, especially the focus was more on imperfections and market operators. The situation continued with individual states tinkering with the APMC, but the frame was kept the same. After 1991, the economic reforms bypassed agricultural markets and these continued under the clutches of touts and middlemen”, Deshpande said. Reforms in the agriculture marketing sector have been long pending, and the market margins from the APMC to the consumers were actually anything between 50 per cent and 3000 per cent, he said. When a farmer sells onion at Rs 2.50 per KG, the consumer gets it for anywhere between Rs 30 and Rs 50 per KG, he said, giving an example.
“A simple calculation of hundred lakh tonnes purchase of wheat by the Food Corporation of India creates a commission of Rs 6480 lakh to the commission agents”, Deshpande claimed. So, the Bills offer a few revolutionary changes, he said, adding, the farmer would now be not compelled to sell in the APMC yard alone and the clutches of the traders in the garb of money lenders would be relaxed. “The infamous interlocking of product and credit market will be released and farmers will be freed to market the produce anywhere in the country or to the exporters”, he said.
“Contract farming system will be covered under the act and there will be a full control of the state in case of any disputes”, Deshpande said. “The bill has very clearly brought out the dispute settlement mechanism and appellate bodies for the purpose of plugging the inadequacies”, he added. Deshpande said:”The bill may result in increased competition, which may also make APMCs more efficient in providing cost-effective services for marketing, make the farmer to get best possible price for the produce and control unnecessary speculative hoarding of certain commodities, and prohibit in creating supply bottlenecks”. But he said it will take time for farmers to reap the full benefits of the passage of the Bills in Parliament. “…because the network of middlemen, money-lenders and market operators are so strong and built over so many years, generations, it will take a little time to break”, Deshpande said. “But once it breaks, farmers’ income will start increasing”.